91°F
weather icon Clear

Analyst: Las Vegas COVID-19 recovery may take 18 to 36 months

Updated July 29, 2020 - 8:32 am

It’s going to take awhile for Southern Nevada to climb out of the deep financial hole created by the coronavirus pandemic.

Las Vegas economic analyst Jeremy Aguero predicted it may take 18 to 36 months for Southern Nevada to recover to a level of where it was before the virus began pummeling the region this year.

That puts recovery at around early 2022 to mid-2023.

Aguero, principal at Las Vegas-based Applied Analysis, was a keynote speaker at Las Vegas Perspective, an online presentation developed by the Las Vegas Global Economic Alliance. The 75-minute event was viewed by more than 1,000 people, organizers said.

It was the 40th anniversary of the first Las Vegas Perspective event.

Aguero’s 40-minute talk focused on the difference between the coronavirus economic downturn and other economic calamities that have hit Southern Nevada. He said businesses, employees and consumers will respond differently than they did in other crises.

“The public health crisis has rapidly transitioned into an economic crisis,” Aguero said in his rapid-fire delivery style. “Our economy is in recession. Let’s have no doubts about that whatsoever as we talk about it.”

But he also said “not all recessions are created equal” and as a result, the recovery from the pandemic is going to be different from recoveries from the 9/11 and 1 October downturns and the Great Recession.

“During the Great Recession, 196,000 jobs were lost over 2½ years,” Aguero said. “In the pandemic, 280,000 jobs in just two months. We fell all the way back to where we were in September 2009. We lost a decade’s worth of employment growth in just a couple of months. This is dramatic.”

Aguero said that because of the pandemic, consumers are acting differently as well, and he said there are three distinct types of consumers, all of which should be marketed to differently.

Three types of consumers

“Some say we’re all overreacting to COVID-19: ‘Let me out now,’ ” he said. “Another says, ‘I’m going to come out when Dr. Fauci says it’s OK.’ And then, there are those that are going to stay in the bubble for as long as they can. These groups of consumers are different and they’re going to affect Nevada in different ways.”

Aguero said the well-documented struggle of airlines serving Las Vegas will continue to create challenges. He said the percentage of fly-in traffic to Las Vegas has grown to 49 percent and travelers simply aren’t interested in taking risks to fly.

The Transportation Security Administration estimates that there are 2 million fewer passengers going through security checkpoints every day now than prior to the pandemic, Aguero said.

While Southwest Airlines, the commercial air carrier that delivers the most passengers to Las Vegas, has promised to keep the middle seats on its Boeing 737s vacant through the end of October, thus assuring that planes could be just 67 percent filled, Aguero said Southwest generally begins making money when cabins are at least 75 percent full and “this isn’t something they’ll be able to sustain.”

The drive market is what’s keeping Las Vegas afloat, but Aguero warned that if infection rates rise, visitation patterns could be taken out of Nevada’s hands.

Quarantine worries

“If we look at where our visitors ultimately come from and we look at restrictions … about a third of states are ones that have specifically said if you come to Nevada, you can’t come back to your state without quarantining, this is a problem,” he said. “If California goes that route, we won’t have to worry about the government shutting down our economy. It’ll get shut down for us overall.”

That’s why Aguero said it is so important for the public to wear facial coverings to prevent the spread of the disease — to prevent further damage to the economy.

“From a fiscal standpoint, we have to recognize that we have an economic problem first and a fiscal problem second,” he said. “What does that mean? The best chances we’re going to have to raise taxes in the state of Nevada is to get employees back to work because businesses and consumption is what raises them. At the same time, we’re going to have to spend down reserves. We’re going to have to maximize federal stimulus. We’re going to have to insure financial flexibility.”

Another problem on the horizon will be more legal cases stemming from disputes between citizens, business, workers and customers.

It’s going to get worse into 2021,” he said. “We’ve got to prepare for caseload growth because I assure you that it is coming and we have to aggressively protect the interests of the state of Nevada.”

Aguero said the public also needs to learn that workers are going to work differently and consumers are going to consume differently as a result of the pandemic. While many workers can’t telecommute if they’re in hospitality jobs, many others will. And Aguero expects purchasing patterns are going to be altered.

“Consumers are going to consume services differently than they did, not some of them but all of them,” he said. “Online sales will increase and there will be a decrease in store sales.”

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
Sahara Las Vegas sues blogger over closure rumor - VIDEO
Sahara Las Vegas has filed a defamation lawsuit against Scott Roeben, the man behind vitalvegas.com, for reporting a rumor that the Las Vegas Strip property would close in September.
MGM Resorts announces “Viva Las Office” program - VIDEO
MGM Resorts International announced its new “Viva Las Office” program that encourages business travelers to work remotely from the Bellagio or Aria.
Las Vegas housing market sees record prices despite pandemic
Las Vegas’ housing market is “on fire” despite the coronavirus pandemic’s devastating effect on the economy, as sales totals surged and prices hit another all-time high last month. (Michael Quine/Las Vegas Review-Journal)
Sahara Las Vegas gets COVID-19 regulatory complaint - VIDEO
Sahara Las Vegas is the first property on the Las Vegas Strip — and the first in Southern Nevada — to receive a regulatory complaint related to coronavirus safety protocols. (Las Vegas Review-Journal)
CEO unsure if Palms will reopen - VIDEO
Frank Fertitta III, chairman and CEO of Red Rock Resorts, said the company doesn't know if or when the Palms or three other Station Casinos properties will reopen. (Las Vegas Review-Journal)
Two Las Vegas visitors win mega progressive jackpots - VIDEO
Two visitors to the Las Vegas Strip won mega progressive jackpots on table games Friday - one at Caesars Palace and another at the Flamingo. (Las Vegas Review-Journal)
D Las Vegas pulls back on dress code policy - Video
The policy barred people with face and neck tattoos from entering the downtown Las Vegas hotel-casino. (Las Vegas Review-Journal)
Amazon warehouse safety measures
Safety measures have been set up at the Amazon warehouse in North Las Vegas. (Las Vegas Review-Journal)
Allegiant Stadium hits substantial completion milestone
Nine-hundred-and-ninety-three days after the groundbreaking ceremony on Nov. 13 2017 on what was then a 62-acre lot of dirt, the $2 billion Allegiant Stadium, home of the Raiders, now holds its own in the Las Vegas skyline.
Tropicana hotel-casino on the Las Vegas Strip up for sale - VIDEO
Gaming and Leisure Properties, landlord of the 35-acre Tropicana, is looking to sell the Las Vegas property and rent it back or sell it outright.
Circa Sports bets big on NFL handicapping contests - Video
A little more than six weeks before the NFL’s scheduled season opener, the Circa sportsbook is staring at a potential multimillion-dollar loss. (Michael Quine/Las Vegas Review-Journal)
Sisolak: Bars in four counties to stay closed - VIDEO
Gov. Steve Sisolak said bars in four counties, including Clark County, will remain closed to help fight COVID-19. (James Schaeffer / Las Vegas Review-Journal)
Circa CEO comments on minor construction flaw
Circa CEO Derek Stevens, who also owns D Las Vegas and Golden Gate, said he had originally planned to fix a misplaced glass panel, but it may be here to stay.
Circa Las Vegas casino gets 1st six-ton exterior sign - Video
The under-construction Circa hotel-casino in downtown Las Vegas gets its first exterior sign bearing its name Thursday morning. (Michael Quine/Las Vegas Review-Journal)
Wynn Resorts Ltd. to place workers on furlough - VIDEO
Wynn Resorts Ltd. will put workers at Wynn Las Vegas and Encore on furlough, effective this week. This comes after paying its Las Vegas employees throughout the 78-day Nevada casino shutdown. (Las Vegas Review-Journal)
Switch, Capital Dynamics break ground on developments - Video
The project, Gigawatt 1®, includes the largest behind-the-meter solar plus battery project in the world. (Las Vegas Review-Journal)
Small crew removes scaffolding, shoring from MSG Sphere project - Video
The MSG Sphere at The Venetian has a skeleton crew on the job site to keep watch on the project, but workers recently removed scaffolding and shoring from the site. (Michael Quine/Las Vegas Review-Journal)
Amid the pandemic, Southern Nevadans are falling behind on mortgages - Video
As Nevada’s foreclosure moratorium ends, homeowners must figure out how to pay off any missed mortgage payments. (Las Vegas Review-Journal)
Casino foot traffic slows as COVID-19 cases rise - VIDEO
As COVID-19 cases continue to rise, Las Vegas casino foot traffic is starting to slow, according to a J.P. Morgan analyst.
Las Vegas entrepreneur Andrew Fonfa dies at 68 - VIDEO
Andrew Fonfa, a developer of the Lucky Dragon hotel-casino just off the Las Vegas Strip, died at age 68.
Las Vegas casinos modify smoking policies - VIDEO
On June 18, Las Vegas Sands Corp. updated its health and safety plan to ask table game players and spectators to refrain from smoking or vaping.
Tourists compare pre-pandemic Vegas to today's restrictions - VIDEO
We spoke with tourists walking up and down Las Vegas Boulevard about their experience so far amid pandemic restrictions, and how it compares to their last time in pre-pandemic Vegas. (James Schaeffer / Las Vegas Review-Journal)
Boyd Gaming Corp. has laid off at least 2,500 Nevada employees - Video
On May 22, the casino operator issued letters warning of possible impending layoffs . affecting anywhere between 25 and 60 percent of employees. The company had approximately 10,000 employees in Nevada.
Cosmopolitan of Las Vegas gives notice of potential layoffs - VIDEO
The Cosmopolitan of Las Vegas sent the state notice of potential layoffs at the 3,000-room property on the Las Vegas Strip.
Is Nevada the ‘gold standard’ for casino coronavirus response? - Video
Whenever experts begin comparing gaming jurisdictions, you’re bound to hear the phrase “gold standard” dropped in the conversation. (Las Vegas Review-Journal)
Resorts World Las Vegas activates 100,000-square-foot LED screen - VIDEO
Resorts World Las Vegas activated its 100,000-square-foot LED screen on its west tower on Independence Day, showing a digital fireworks display. (Las Vegas Review-Journal)
Station Casinos president dies in watercraft accident - VIDEO
Richard Haskins, president of Red Rock Resorts Inc. and Station Casinos, died Saturday in a watercraft accident in Michigan, according to a statement released by the company. (Las Vegas Review-Journal)
Hockey arena opponents erred in ballot initiative - Video
Opponents of a minor league hockey arena in Henderson collected enough verified signatures to put the disputed project on the November ballot, but then a problem emerged: A procedural error on the petition.
Layoffs at 'The Drew' force staff to sue owner
Rj Business reporter Eli Segall talks about the lawsuit and the future of the unfinished hotel and casino.
Vegas tourists react to mask mandate - VIDEO
Governor Steve Sisolak announced on Wednesday a mandate to wear face masks starting Friday. Down on the Las Vegas Strip tourists reacted on camera to the news. (James Schaeffer / Las Vegas Review-Journal)
THE LATEST
McCarran airport no longer using WeChat app

WeChat — one of the apps President Donald Trump believes could be a national security risk — is no longer being used as a tourism guide for Chinese visitors at McCarran International Airport.